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re: When does the IRS consider someone a professional?
Posted on 8/28/26 at 11:47 am to jonnyanony
Posted on 8/28/26 at 11:47 am to jonnyanony
quote:
The IRS doesn't consider someone a professional.
The IRS considers income.
Technically not true, though I guess we can play semantics on their termonology. The IRS has "activity not engaged in for profit", which would generally be considered your hobby (amateur) type income. Then you have business (professional) income.
Where and how the IRS treats college athletes differently than professional athletes, is NIL income is considered self-employment income and reported via 1099. Professional athletes are w2 employees of the team.
So, from a legal tax perspective, earning money for NIL is a self-employed business separate from competing in college athletics and not a salary for competing in said sport. Again, we can get into semantics of everything but from a legal perspective, they are wholly separate things.
Posted on 8/28/26 at 11:48 am to thatthang
That's a completely different definition of professional.
Posted on 8/28/26 at 11:49 am to GoCrazyAuburn
quote:
Where and how the IRS treats college athletes differently than professional athletes, is NIL income is considered self-employment income and reported via 1099. Professional athletes are w2 employees of the team.
Right, but this is just a matter of compensation and FICA contributions, etc. Your filter type doesn't mean anything to them in terms of "professionalism," just in terms of effective tax rate(s).
Posted on 8/28/26 at 11:50 am to GAT BoilerPickle Doc
quote:
Thus the IRS doesn't make a distinction between 500k paid to John Doe regardless if he's compensated by the Dallas Cowboys or Texas Longhorns ... correct?
No, However they do make a distinction between being paid $500k as a w2 employee of the dallas cowboys and being paid as a self-employeed 1099 from a third party entity.
quote:
Once a professional, always a professional regardless of the employer
Well, the employer for the college athletes is themselves, so technically speaking, this is not true. The employer absolutely matters with how you are trying to define "professional".
Posted on 8/28/26 at 12:00 pm to jonnyanony
quote:
That's a completely different definition of professional.
Yes, 100%. I was just addressing what appeared to be a blanket statement by clarifying that the IRS does, in fact, get into the business of defining professionals in some fields.
Posted on 8/28/26 at 12:12 pm to GAT BoilerPickle Doc
If you’re getting a W2 or 1099, you better be filing.
If you’re not getting a W2 or 1099, the IRS is way more interested in who is not filing those than you.
Was I a “professional” when I was 20 yo and getting paid $10K+? Absolutely not. Did that matter? No. The IRS doesn’t label as such.
If you’re not getting a W2 or 1099, the IRS is way more interested in who is not filing those than you.
Was I a “professional” when I was 20 yo and getting paid $10K+? Absolutely not. Did that matter? No. The IRS doesn’t label as such.
Posted on 8/28/26 at 1:03 pm to GAT BoilerPickle Doc
When they start making money …
Posted on 8/28/26 at 1:06 pm to ouflak
“semper ubi sub ubi”
Posted on 8/28/26 at 7:46 pm to GAT BoilerPickle Doc
IRS doesn’t give a shite where the money comes from..only that it’s taxed.
Posted on 8/28/26 at 10:10 pm to GoCrazyAuburn
quote:
Well, the employer for the college athletes is themselves, so technically speaking, this is not true. The employer absolutely matters with how you are trying to define "professional".
Lol, no.
Most high end consultants aren't employees, they are paid via contracts for services rendered, and depending on what they've set up on their side, they are either 1099 or corp-to-corp. They are very much professionals either way.
Bottom line: You are technically a professional the moment you receive money for your services instead of doing them as a hobby or amateur.
This post was edited on 8/28/26 at 10:12 pm
Posted on 8/28/26 at 11:24 pm to clamdip
IRS only wants their cut. They don’t care about anything else at all
Posted on 8/28/26 at 11:58 pm to GAT BoilerPickle Doc
This thread is based on a category error and thus makes no sense.
Posted on 8/29/26 at 5:20 am to GAT BoilerPickle Doc
Right. The terms Professional and Employee getting confused.
quote:
A professional athlete is a person who competes in sports for financial compensation, such as a salary, wages, or prize money, rather than as a hobby.
quote:
Core Characteristics
Compensation: Earns money through performance, team contracts, sponsorships, or prizes.
Training: Dedicates major time to physical conditioning, skill practice, and strategy.
Competition: Participates in organized, official athletic events.
Posted on 8/29/26 at 7:38 am to GAT BoilerPickle Doc
quote:It's not an IRS issue. You have to go back to the NCAA and see how they define amateurism v. professionalism. The IRS only cares if you have a certain AGI (something like $16,000 maybe?).
Thus earning an income for services rendered would constitute professionalism?
Posted on 8/29/26 at 8:52 am to GAT BoilerPickle Doc
quote:
When does the IRS consider someone a professional?
The IRS odes not care about a definition of who is or is not a professional. They only care about income. How much income a person makes and if it is taxable. They don't care about a label identifying someone as a "professional".
Posted on 8/29/26 at 9:02 am to GAT BoilerPickle Doc
quote:
Once a professional, always a professional regardless of the employer
The NCAA sets the parameters of what they consider professional as guidelines for rules. The NCAA says that NIL is not being paid for playing football, but they are being compensated for Name Image and Likeness. So as far as the NCAA is concerned, they are not professional football players. However, once they turn pro, (Playing specifically for pay) they are then being compensated for playing football and therefore are professionals for the purposes of rule interpretation. It is a delicate dance the NCAA plays.
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